13/07/2017 BBC Business Live


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13/07/2017

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This is Business Live from BBC News with Alice Baxter and Ben Bland.

:00:00.:00:09.

Can President Trump make French ties great again?

:00:10.:00:11.

With pressure over climate change and trade will there be a meeting

:00:12.:00:15.

Live from London, that's our top story on Thursday 13th of July.

:00:16.:00:42.

These were the pictures about half an arrogant in Paris whether US

:00:43.:00:48.

president has just arrived to be guest of honour at France's bastille

:00:49.:00:52.

day celebrations. Plus free trade with the world's used the economy is

:00:53.:01:00.

also up for discussion side of the world, with the US saying it wants

:01:01.:01:04.

to renegotiate with South Korea. The latest from the markets where Asia

:01:05.:01:07.

extended a bit of a global rally, responding well with some data. Here

:01:08.:01:11.

in Europe, a bit of a mixed picture. And we'll be getting

:01:12.:01:17.

the inside track on how one man's made a sparkling success of British

:01:18.:01:19.

wine, despite the industry being overshadowed by its French

:01:20.:01:22.

rivals for so long. And as a court rules

:01:23.:01:24.

on whether checking potential employees social

:01:25.:01:26.

media is legal, let us know, would you be happy for a recruiter

:01:27.:01:28.

to look through your social media? In the last hour, the US

:01:29.:01:31.

President Donald Trump He's there to celebrate the French

:01:32.:01:49.

holiday of Bastille Day But as the White House put it, he'll

:01:50.:01:56.

be looking to build on the countries It comes as President Macron told

:01:57.:02:04.

a French newspaper this his country "must reform its economy

:02:05.:02:08.

to give it more vigour". The leaders will discuss the EU's

:02:09.:02:15.

trading relationship with the US, Last year, they sold each other

:02:16.:02:17.

this: $686 billion worth of goods. The problem for President Trump

:02:18.:02:29.

is it's tilted in Europe's favour. It runs a surplus with the US -

:02:30.:02:35.

in other words, it sells more goods to the US than the other way around

:02:36.:02:38.

- by this much - $147 billion. Which brings us to this:

:02:39.:02:44.

the Transatlantic Trade Talks on the massive free trade deal

:02:45.:02:46.

between the EU and US have been suspended since Mr Trump

:02:47.:02:54.

came to power. The business world will

:02:55.:02:56.

be watching closely. As it will on this -

:02:57.:03:05.

the Paris climate change accord - Mr Macron says he will be pressing

:03:06.:03:07.

Mr Trump to sign up again, Another source of transatlantic

:03:08.:03:11.

tension - European pressure on the big US tech firms

:03:12.:03:16.

over tax avoidance. But on Wednesday, a French court

:03:17.:03:26.

ruled that Google is not liable And there might be

:03:27.:03:29.

more common ground. Mr Trump has demanded

:03:30.:03:38.

European members of Nato Mr Macron agrees -

:03:39.:03:39.

he's pledged to increase France's defence spending to Nato's

:03:40.:03:46.

target of 2% of GDP, Cloe Ragot is a France

:03:47.:03:48.

analyst with Eurasia Group, who advise businesses on political

:03:49.:03:57.

risks. Cloe, a very good welcome to

:03:58.:04:11.

Business Live. Just before we get onto it, I just wonder, these are

:04:12.:04:15.

two men, similar back story, the ground in the corporate world who

:04:16.:04:18.

have then gone on to take the top job in politics but very different

:04:19.:04:21.

personalities. How do you think that will play out in these discussions?

:04:22.:04:27.

They both have an interest to actually work together, so I think

:04:28.:04:32.

despite all the disagreement, as we know, on climate change, on trade,

:04:33.:04:37.

and also to some extent on defence, I think they will just avoid those

:04:38.:04:45.

topics and focus, for instance, on, you know, more trade relation, and

:04:46.:04:51.

also on counterterrorism. One of the things that we touched on just there

:04:52.:04:57.

was the trade deficit that the US has with the European Union. It has

:04:58.:05:04.

been a clarion call that Trump has gone back to time and time again,

:05:05.:05:06.

that he doesn't like these imbalances. What hope do you think

:05:07.:05:11.

there is, then, of getting him to restart talks on the Transatlantic

:05:12.:05:15.

Trade and Investment Partnership, a free-trade deal, when there already

:05:16.:05:20.

exists this imbalance? I think it is actually very unlikely that the

:05:21.:05:26.

talks will restart while Trump is in power. I think one of the main

:05:27.:05:33.

platforms actually off is to fight against this tax avoidance, so you

:05:34.:05:38.

also mentioned Google, it is very unlikely that they would find some

:05:39.:05:46.

agreements in the short-term. We also mentioned earlier the discord

:05:47.:05:52.

over climate. Trump very publicly pulled the United States out of the

:05:53.:05:56.

Paris accord. Macron has been very vocal in his approval and that. --

:05:57.:06:05.

in his approval of that. Macron hopes he will be able to persuade

:06:06.:06:10.

Trump to come back into the Paris agreement. However, we actually

:06:11.:06:18.

don't think that Trump will rejoin the Paris agreement, and that is

:06:19.:06:22.

exactly also one of the main reasons why it was quite surprising that he

:06:23.:06:27.

was invited for the 14th of July. 13th and 14th of July in France.

:06:28.:06:31.

Such an important day in France, yes. Thank you very much, Cloe.

:06:32.:06:34.

Let's take a look at some of the other stories making the news...

:06:35.:06:37.

The maker of Havaianas - perhaps the world's most famous

:06:38.:06:42.

brand of flip-flops - has been sold for $1.1 billion.

:06:43.:06:48.

The company which owned it is looking to raise cash

:06:49.:06:51.

after being caught up in Brazil's corruption scandal.

:06:52.:06:54.

Havaianas are one of Brazil's best-known international brands,

:06:55.:06:56.

with over 200 million pairs of flip-flops sold per year.

:06:57.:07:01.

The boss of Qatar Airways says it still plans, despite the US airline

:07:02.:07:10.

is deciding to terminate the pair's are sharing agreement. On Wednesday

:07:11.:07:14.

American airline said it was ending its co-share deal with both Qatar

:07:15.:07:18.

airlines. It said it believed the two were getting a legal state

:07:19.:07:22.

subsidies, something which they denied.

:07:23.:07:22.

Irish business leaders have called for a the European Union to provide

:07:23.:07:30.

a state aid programme worth more one billion euro state aid programme

:07:31.:07:33.

from the European Union in order to protect Irish firms in the event

:07:34.:07:36.

The Irish Business and Employers Confederation said that if Britain

:07:37.:07:39.

left the customs union, it would massively disrupt trade,

:07:40.:07:42.

Britain is Ireland's largest trading partner,

:07:43.:07:45.

The US has said it wants to renegotiate what it's calling

:07:46.:07:55.

a lopsided trade deal with South Korea.

:07:56.:07:57.

Monaco, tell us more. The news is not much of a surprise to the South

:07:58.:08:11.

Koreans. The President met with the Trump administration in Washington

:08:12.:08:14.

just last month, and may walk away with a message that the US felt that

:08:15.:08:17.

the free trade agreement is not a great deal. South Korea is a major

:08:18.:08:25.

US economic partner, more than $144 billion of goods and services was

:08:26.:08:27.

traded between the two countries last year. In 2012, the Obama

:08:28.:08:38.

administration said the FDA would boost its businesses, but exports

:08:39.:08:41.

have declined almost 3% since the deal went in effect, and at the same

:08:42.:08:45.

time imports from South Korean companies have increased by about

:08:46.:08:49.

23%. The US Trade Minister said yesterday he wants to have talks

:08:50.:08:53.

with the Moon administration within 30 days, however that might be a

:08:54.:09:01.

problem for the South Koreans. President Moon is yet to appoint the

:09:02.:09:07.

top trade post and it may not be filled in time. Thank you, let's

:09:08.:09:11.

stay in the region. Let's stay in the region now

:09:12.:09:17.

where some Asian shares scaled They took their cue from Wall Street

:09:18.:09:20.

which posted record peaks. That followed the testimony of Fed

:09:21.:09:24.

chief Janet Yellen who sounded more doveish than many had expected -

:09:25.:09:27.

talking of a gradual approach to tightening as the US continues

:09:28.:09:30.

to grapple with low inflation. Equities were underpinned

:09:31.:09:32.

by a drop in bond yields Sentiment also got another boost

:09:33.:09:34.

when China reported upbeat data Only Japan's Nikkei was somewhat

:09:35.:09:38.

restrained by a firmer yen Here in Europe, markets have

:09:39.:09:42.

also opened slightly up. We're expecting news out

:09:43.:09:45.

from ASOS and Astra Zenica. And Michelle Fleury has

:09:46.:09:57.

the details about what's ahead One of the major US airlines, Delta,

:09:58.:10:13.

reported second -- reports second-quarter earnings this

:10:14.:10:15.

Thursday. Wall Street hopes it will point to clear skies ahead. Last

:10:16.:10:19.

week, the carrier said its revenue per passion Joe was up, helped by

:10:20.:10:23.

improving average fares. -- per passenger. The number two US airline

:10:24.:10:28.

by passenger traffic is expected to post a rise in quarterly profit.

:10:29.:10:32.

Another company turning in its report card is Cargill. Full-year

:10:33.:10:36.

results for the privately held global commodities trader are likely

:10:37.:10:41.

to get a boost, thanks to healthy exports of US beef, but a glut of

:10:42.:10:44.

global seeds, that is likely to weigh on its agricultural business

:10:45.:10:50.

division. American central banker Janet Yellin delivers her second day

:10:51.:10:57.

of monetary policy testimony to the Senate bank committee. On Wednesday

:10:58.:11:00.

she told US lawmakers that interest rates would not have to rise all

:11:01.:11:04.

that much further to reach the third's mutual level, and that's

:11:05.:11:09.

sent stocks and the Dow to record levels.

:11:10.:11:12.

Joining us is Jane Foley, senior currency strategist at Rabobank.

:11:13.:11:15.

Janet Yellin's testimony, much awaited, and it has, you know,

:11:16.:11:23.

caused some movements, as expected. Certainly, and really was the tone

:11:24.:11:27.

of her comments. The Federal Reserve have been hiking interest rates for

:11:28.:11:31.

a while and this year they have done it twice, and their official

:11:32.:11:33.

guidance suggested we would do it again this year and maybe three

:11:34.:11:36.

times next year, but of course inflation in the year has been

:11:37.:11:40.

required benign, as in most other countries, apart from the UK.

:11:41.:11:44.

Yesterday, Janet Yellin gave me a little bit of good news. She sort of

:11:45.:11:48.

implied that maybe she was a bit more concerned about inflation and

:11:49.:11:51.

she had previously been, and suggested that maybe they may not

:11:52.:11:54.

therefore hike interest rates this year. Good the stock markets, good

:11:55.:11:59.

for risk and that is what the market reacted to. It pushed the Dow to a

:12:00.:12:05.

record high close. Yes, and softened the dollar a little bit as well. You

:12:06.:12:10.

are quoted on this story in the FT this morning. Canada, the Canadian

:12:11.:12:22.

dollar, the Looney, I love that term, rocketing for the first time

:12:23.:12:27.

in seven years. Again, this Israeli interesting, in the context of all

:12:28.:12:31.

the developed countries and missed the session of whether they will

:12:32.:12:34.

hike interest rates more generally. The market was anticipating this,

:12:35.:12:38.

they had a couple of comments from the governor and the deputy governor

:12:39.:12:42.

suggesting that they might, but what surprised the market was the

:12:43.:12:44.

statement that accompanied that interest rate hike, because they

:12:45.:12:48.

seem to suggest they would do it again, even though their inflation

:12:49.:12:51.

target is roundabout 2% and then inflation rates are round 1.3. So

:12:52.:12:56.

they are suggesting what is bearing down in Canada in inflation is

:12:57.:13:00.

temporary, and interestingly the Fed is saying that as well. But every

:13:01.:13:09.

country in the GTN, temporary... Inflation is quite benign, but not

:13:10.:13:17.

at the place had previous economic cycles abroad. See you later to go

:13:18.:13:19.

through some business papers. We'll meet the man making

:13:20.:13:20.

a sparkling success of English wine despite the industry

:13:21.:13:27.

being overshadowed by its I think we get to try some here on

:13:28.:13:29.

Business Live! Southern Rail owners GTR have been

:13:30.:13:39.

fined ?13.4m for poor performance. The firm has experienced waves

:13:40.:13:49.

of industrial action on its Southern rail route over the past year,

:13:50.:13:52.

much to the continuing Theo Leggett is in our

:13:53.:13:54.

Business Newsroom. Fiola, tell us more. OK, well, as

:13:55.:14:09.

anybody who has travelled on southern over the past year has

:14:10.:14:13.

known it has had a pretty rough time of it. 58,000 services or

:14:14.:14:17.

thereabouts were cancelled last year, and on various occasions the

:14:18.:14:20.

network came almost to a grinding halt. The biggest factor in that was

:14:21.:14:24.

a dispute between GTR and train staff. The unions, who claimed that

:14:25.:14:30.

the company's attempts to try and make drivers responsible for opening

:14:31.:14:34.

and closing doors and changing the role of conductors was unsafe. That

:14:35.:14:38.

was the biggest factor in all the delays. There were others. What the

:14:39.:14:42.

government has been doing is examining whether or not GTR was in

:14:43.:14:45.

breach of its franchise agreement, and they have imposed this fine of

:14:46.:14:52.

?13.4 million, and suggested at the same time that, although there were

:14:53.:14:56.

problems at Southern, most of them or not the franchise operator's

:14:57.:15:00.

fault. And therefore the fine could have been a lot higher, if they

:15:01.:15:03.

decided that the industrial action and all that kind of thing was the

:15:04.:15:06.

responsibility of the franchise holder. It appears they have decided

:15:07.:15:12.

that is the case. Is that is why Southern has been penalised, but

:15:13.:15:14.

what response has there been to this decision? It will come as a relief

:15:15.:15:20.

to the majority owners of GTR, go-ahead group. Have a look at this

:15:21.:15:25.

graph, in February they issued a profits warning and the share price

:15:26.:15:28.

came crashing down. That profits warning was largely due to problems

:15:29.:15:33.

at Southern. So for go-ahead group to get this behind them, and to say

:15:34.:15:38.

that it could have been a lot worse, that is good news. Obviously the

:15:39.:15:41.

unions are taking a different viewpoint. The RMT has come out and

:15:42.:15:46.

said this is a whitewash. Consumer groups don't seem too happy about it

:15:47.:15:47.

either. Plenty more on the website. It is

:15:48.:15:58.

updated throughout the day. The story on the other moment, Mike

:15:59.:16:04.

Ashley of Sports Direct, he has bought a 25% stake in computer

:16:05.:16:10.

gaming group. Two weeks ago, shares plunged after issuing a profit

:16:11.:16:19.

warning. You can read all about it on the business pages online. You

:16:20.:16:29.

are watching Business Live. The US president has just arrived in France

:16:30.:16:33.

where trade will feature heavily in his talks with President Macron.

:16:34.:16:39.

Markets have just opened in Europe. A mixed picture. Not necessarily

:16:40.:16:43.

following the global rally we saw in Asia overnight.

:16:44.:16:48.

The thought of wine probably conjures up images of vineyards

:16:49.:16:51.

But increasingly wine from Britain is starting

:16:52.:16:55.

The English wine industry grew 16% between 2015 and 2016

:16:56.:17:00.

with revenues rising to $170 million.

:17:01.:17:05.

By comparison, French wine sales exceeded $13 billion in 2015.

:17:06.:17:14.

We're joined by Charlie Holland, CEO and head winemaker

:17:15.:17:18.

Very warm welcome. Thank you for having me. Particularly warm welcome

:17:19.:17:32.

as you have brought some sparkling wine with you! I will try and do

:17:33.:17:39.

this without making a mess. No one is watching! We mentioned in

:17:40.:17:47.

the introduction that as an English winemaker, do you feel there is a

:17:48.:17:54.

snobbery about your product? Are people asking, why would I buy

:17:55.:17:58.

English when I can buy French, Italian, New Zealand? It used to be

:17:59.:18:02.

the case ten years ago, people said that, but there has been a big

:18:03.:18:08.

change in people's perception towards English sparkling wine. I

:18:09.:18:12.

think one of the reasons is the international competition results we

:18:13.:18:15.

have had over the numbers of years where we have been pitted... The

:18:16.:18:21.

best sound in the world! Pitted against some of the best sparkling

:18:22.:18:29.

wines in the world and people recognise the quality is there now.

:18:30.:18:33.

This is obviously sparkling wine, we just heard the pop, 95% of what you

:18:34.:18:41.

produce is sparkling, why is that? We focus on predominantly sparkling

:18:42.:18:46.

wine. Our climb it really is ideally suited for sparkling wine production

:18:47.:18:52.

-- our climb it. We are able to fully ripe and the grapes but we are

:18:53.:18:57.

able to maintain the acidity which is important for sparkling wine. You

:18:58.:19:02.

mentioned the acidity, that used to be one of the stigmas attached to

:19:03.:19:09.

English wine, it was too acidic. How have you approached that marketing

:19:10.:19:11.

challenge of changing perception? It is about making the best possible

:19:12.:19:18.

product we can. We have some exceptional vineyards and where we

:19:19.:19:22.

are based in the south-east of England, in the Kent countryside,

:19:23.:19:26.

the Garden of England, known for producing some of the best grapes

:19:27.:19:30.

and fruit in the world. The climate is very similar to the wine

:19:31.:19:35.

producing regions of, say, France. Very similar to northern France, in,

:19:36.:19:42.

for example, Champagne. Sparkling wine is what we can compete on a

:19:43.:19:47.

world level at. Has the weaker pound helps? We are seeing a lot of

:19:48.:19:54.

appetite for our wines abroad, we are exporting to 14 different

:19:55.:19:58.

countries. The falling pound is actually quite a good thing for us

:19:59.:20:07.

going to export marks -- markets. Slightly distracted! The UK's

:20:08.:20:12.

climate does not seem to naturally lend itself to some grapes that

:20:13.:20:17.

would necessarily make a nice wine? For sparkling wine, we have the

:20:18.:20:22.

perfect climate. If you were trying to make a blockbuster red wine, that

:20:23.:20:26.

might be more challenging. But for more refined and elegant wines that

:20:27.:20:32.

have a lovely vibrancy to them, our climate is perfect. I feel like it

:20:33.:20:39.

would be rude not to. Cheers! Just to spoil the illusion, they are

:20:40.:20:44.

plastic glasses, for safety, but still... That is lovely. That is why

:20:45.:20:50.

you did not hear the clink. Lovely. Really smooth. Even at this time in

:20:51.:20:55.

the morning, still lovely. Thanks very much.

:20:56.:20:59.

We are also talking about artificial intelligence.

:21:00.:21:01.

It has been accused of threatening everything from jobs

:21:02.:21:03.

It's also being called the most important technology to come

:21:04.:21:07.

along since electricity, and companies are racing

:21:08.:21:09.

Microsoft has outlined a code of ethics.

:21:10.:21:16.

Here's our technology correspondent Rory Cellan-Jones:

:21:17.:21:21.

What if artificial intelligence could see your world and interpret

:21:22.:21:28.

it for you? Microsoft engineer who is blind is showing me a new app

:21:29.:21:33.

called seeing AI designed to help visually impaired people. As well as

:21:34.:21:37.

reading text, it can tell him about the people in front of him, as

:21:38.:21:41.

sometimes he gets it wrong. 50-year-old man looking happy. I am

:21:42.:21:48.

getting younger by the minute! This is an application close to my heart

:21:49.:21:53.

but the general AI is applicable in so many different ways. From around

:21:54.:21:59.

the world, Microsoft scientists came to London to show off their

:22:00.:22:04.

projects. Like this live translation system for presentations. Or

:22:05.:22:12.

software which can search through hours of closed-circuit TV, as well

:22:13.:22:15.

as staking a claim as a leader in this technology, the firm has come

:22:16.:22:19.

up with ethical principles for AI. Microsoft believes we are creating

:22:20.:22:24.

AI to amplify human ingenuity, not to compete with it. The human is the

:22:25.:22:32.

hero. I want to endow you with superpowers. Microsoft is just one

:22:33.:22:37.

of the tech giants battling to profit from advances in artificial

:22:38.:22:40.

intelligence which are giving computers skills once restricted to

:22:41.:22:46.

humans. They are learning to see, one example, driverless cars can see

:22:47.:22:50.

exactly where they are going. They are learning to hear what we say to

:22:51.:22:57.

respond to it. Amazon's Alexa can respond when we asked them to give

:22:58.:23:01.

us the news or recommend a restaurant. They are even making

:23:02.:23:06.

judgments. For instance, on whether a scan shows a malignant tumour. In

:23:07.:23:13.

this battle over this crucial technology, Google and Facebook are

:23:14.:23:17.

spending vast sums on research, but China refuses to be left behind.

:23:18.:23:21.

Investing heavily to build robots who will take over from humans in

:23:22.:23:27.

the vast factories. It looks like AI will transform the economy as it

:23:28.:23:31.

transformed industries, potentially make us all wealthier and happier

:23:32.:23:34.

and the companies who get their first will take the spoils, the

:23:35.:23:38.

rewards. You have to come out loud and strong. Progress in artificial

:23:39.:23:44.

intelligence has been more rapid in recent years than even the

:23:45.:23:47.

scientists predicted and companies like Microsoft know they cannot

:23:48.:23:54.

afford to fall behind. What other business stories have we got? Senior

:23:55.:24:00.

currency strategist joins us once again. One we were picking out, the

:24:01.:24:06.

article in the FT about EU regulators trying to clamp down on

:24:07.:24:11.

prospective employers searching people's social media pages? The

:24:12.:24:17.

story references the fact 60% of employers look at social media in

:24:18.:24:21.

order to get a picture of the potential employee. What this says

:24:22.:24:26.

is that they may not be able to do that. Certainly they should ask the

:24:27.:24:30.

prospective employee for their permission. And even if the data is

:24:31.:24:34.

public, they cannot assume they can use it for their own purposes. We

:24:35.:24:39.

were asking people today to tweet on that topic, how would they feel? A

:24:40.:24:46.

lot of responses. Thank you. Dale says, and intrusion of my privacy,

:24:47.:24:53.

but the posts are in a public setting. Linda says, take a look if

:24:54.:24:58.

you wish. Damian says, an invasion of privacy. Dave says, perfectly

:24:59.:25:03.

happy, I only post things I would be happy to hear about myself on BBC

:25:04.:25:10.

News. How would you feel? Is that something you feel is commonly

:25:11.:25:15.

practised in the financial services? I know that the hiring process in

:25:16.:25:19.

the financial services is very detailed. You have to fit a certain

:25:20.:25:25.

type of person because of the regulator, the criminal potential in

:25:26.:25:31.

the industry. I think the people again, this has just been mentioned,

:25:32.:25:35.

that should be most concerned our young people who might perhaps be

:25:36.:25:39.

doing foolish things, posting them on a chat site, and years later, it

:25:40.:25:44.

comes back to home. I know that at some schools there are warnings

:25:45.:25:48.

going out for the last few years, be careful what you post, these things

:25:49.:25:52.

could be on there for ever and they might not do you good later on. You

:25:53.:25:57.

do not think about that when you 14. Thank you very much. We will see you

:25:58.:25:59.

soon. Thanks for watching. Quite a chilly start for some,

:26:00.:26:14.

especially in rural areas. Largely dry and plenty of sunshine

:26:15.:26:16.